Setting up your own business involves planning and organization.
Small business got its first big boost after World War II, when returning veterans looking for work in the already saturated factory market had no choice but to set up their own enterprises, according to the Small Business Administration. The agency reports that in 2010, small businesses make up 98 percent of all U.S. businesses and generate between 60 percent and 80 percent of all new jobs. Establishing your own business offers numerous opportunities and challenges. Before getting started, it’s useful to understand the basics of setting up
your own business.
Setting up your own business requires extensive planning. You need to make decisions about what kind of business you’d like to run, including products or services offered and location. You’ll need to determine the legal structure of the business, whether it’s a sole proprietorship, partnership or corporation. An important initial step involves writing a business plan. Business plans include a series of organized reports detailing the company’s goals; offerings; management and distribution organization; plans for advertising and marketing; and analysis of the current market and competitors. Potential lenders and investors use business plans to evaluate the potential gains and risks in becoming involved with your business.
Securing financial support is a basic step in setting up your own business. Options include drawing from personal savings and applying for loans from banks and credit unions. Venture capital firms aren’t appropriate revenue sources for most new businesses, according to http://capital-connection.com, because they allocate most
funds to more established businesses. These firms generally look for businesses with the potential for rapidly increasing sales and substantial profits, typically favoring industries like biotechnology, energy, software, medical devices and information technology. Securing outside funding typically involves providing personal financial statements and documents to establish creditworthiness, or documenting collateral you’d be willing to pledge as security on the loan.
SETTING UP SHOP.
When setting up your own business, you’ll need to procure required licensing and permits including a business license, tax identification number and other relevant documents. Liability insurance may be required in your area. During this stage of setting up your business, you will also secure a location and any inventory necessary to begin operating. This may include products or items needed to provide services and standard business equipment including phones, computers, fax machines and ledgers.
Your business plan will be an excellent resource for establishing the company’s operational procedures. At this stage, you’ll determine pricing; set up an accounting system including payroll, invoicing and bookkeeping; set hours; and establish introductory marketing and advertising campaigns. While the business plan will serve as a general guideline, many business owners make modifications as real-world challenges emerge and situations evolve.
It’s possible you’ll be the company’s sole employee. But business owners typically hire employees, which isn’t as simple as hanging a “Help Wanted” sign in the window. You’ll want to determine whether it makes sense to hire an employee or work with an independent contractor. Set procedures for interviews, background checks and any related drug testing or physical examination requirements. Employers must also comply with federal
rules regarding the hiring of individuals who are legally permitted to work in the U.S.
About the Author.
Bettina Drew is a California editor and writer specializing in news, travel, community features and the arts. She’s written for the “Los Angeles Times,” the Scripps Howard News Service in Washington, D.C. and a number of literary publications since 2000. Drew holds a Bachelor of Arts degree from the University of California, San Diego.
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